Open Letter to Mr. James D. Wolfensohn, President of the World Bank, from 86 NGOs in 28 Countries Concerning the Chad/Cameroon Oil & Pipeline Project

July 9, 1998

James D. Wolfensohn, President
The World Bank
1818 H Street, N.W.

Washington, D.C. 20433 Dear Mr. Wolfensohn, The 86 undersigned environment, development, human rights and religious organizations from 28 countries call upon you to suspend World Bank participation in the Chad/Cameroon Oil & Pipeline project until respect for human rights and compliance with World Bank environmental and other policies can be fully guaranteed.We are writing to draw your attention to the especially troublesome situation, including the severe violation of human rights, in southern Chad and to the inadequacy of the environmental impact assessment and environmental management plan for the project submitted to the Bank by Exxon.

The Chad-Cameroon Petroleum Development and Pipeline project, whose primary sponsor is an oil consortium consisting of Exxon, Shell and ELF Aquitaine, plans to develop three oil fields in southern Chad and put in place an export system including a 1,050 kilometer long pipeline, most of which passes through Cameroon, and an off-shore loading facility for crude oil on Cameroon's southern coast. At present, IBRD plans to provide loans of approximately US $ 115 million to the governments of Chad and Cameroon to help finance their respective portions (ca. 15%) of equity in two pipeline companies, which to 80% or more will be owned by the oil consortium. In addition, the IFC plans to provide loans for about US $ 250 million for the oil export system. According to an Exxon project document of August 15, 1996, the sponsors consider significant World Bank participation to be a pre-requisite for going forward with the project.

Therefore your action may be decisive in determining the outcome of this project. Civil society organizations in Chad and Cameroon have expressed serious concerns about the preparation of the project relating to the lack of accountability to affected populations, lack of transparency, and absence of the rule of law. Their concerns reflect precisely the values that you are championing in promoting good governance and in your fight against corruption. Under present circumstances we are concerned that the project will lead to escalating civil violence, especially in southern Chad.

Moreover, at present there are no guarantees that the financial resources generated by the project will be used to improve living conditions in the countries since poverty alleviation does not seem to be the highest priority of both governments. Contrary to World Bank requirements, there has been no meaningful consultation of local people during the EIA process (formerly OD 4.01 on Environmental Assessment ,at present OP 4.01 on Environmental Assessment in both their Bank and IFC draft versions). Furthermore, the EIA, which was commissioned by EXXON gives little guarantee that internationally accepted standards for environmental protection will be put in place. I.

Human rights According to reports by Amnesty International, in March 1998 one hundred unarmed civilians were massacred by Chadian security forces in the oil-producing region in southern Chad. This latest massacre follows a previous one in October 1997, which took the lives of at least eighty unarmed people. Representatives of Chadian human rights organizations and journalists are especially at risk (Amnesty International, Urgent Action, December 1997). According to international press reports, Chadian government forces have resorted to indiscriminate killings and repression of the civilian population in the project area as it pursues rebel groups, who are also known for showing little respect for human rights of civilians (Agence France Press, November 1997). A recent Resolution by the European Parliament calls attention to the constant threat of more extrajudicial executions, arbitrary arrests and torture in the region (European Parliament, Resolution on Human Rights Villations in Chad, Brussels, June 18, 1998).

International observers believe that the renewed conflict and violence are linked to the prospect of massive oil revenues There has been no investigation into the killings and none of those responsible are being brought to justice. As reported by Agence France Press, Chad's President recently denounced what he called "pre-packaged democracy" being imposed on African states by rich countries. Under such circumstances, the outcome of the high-stakes project may be a renewal of Chad's 30-year long civil war rather than genuine efforts in poverty alleviation and sustainable development. II. Environmental Impact Assessment and Management Plan Exxon has commissioned a voluminous Environmental Impact Assessment and Environmental Management Plan (Environmental Assessment, Chad Export Project, Chad Portion and Cameroon Portion, October 1997 and Environmental Management Plan, Chad Portion November 1997/ Cameroon Portion, February 1998). A report to be released on July 10, 1998 by the official Dutch Commission on Environmental Impact Assessment states that: "The Commission concludes that essential information is lacking in the EAs.

On the basis of the EAs neither the project nor its environmental consequences can fully be overseen." Separate analyses by NGOs of the Environmental Impact Assessment and Management Plan have reached similar conclusions (Chad Portion by Friends of the Earth Netherlands, February 1998, Cameroon Portion by Center for Environment and Development, Cameroon and Environmental Defense Fund, May 1998). The following brief analysis of the Environmental Impact Assessment and Management Plan refers to the Cameroon portion of the project. II. a) The Environmental Management Plan (EMP) The World Bank's requirements for Environmental Management Plans include the identification and summary of all significant adverse impacts that are anticipated, the description and technical details for each mitigation measure, the assignment of responsibility for carrying out the mitigation measures and the implementation schedule for the mitigation measures (OP 4.01 - Annex C). The EMP falls significantly short of these requirements.

It states, for example, that the project ".will avoid, where and when practical, those situations or incidents that could cause unacceptable, adverse biophysical, socio-economic or health impacts" (1.3.2). What are those potentially 'unacceptable' impacts and who will define 'when and where something is practical' to avoid these 'unacceptable' impacts? The EMP does not say. On the Mb,r, Rift Valley, a region of important wildlife and biodiversity, the EMP states that it is "one area that is relatively less degraded than the other savanna region in the northern section of Cameroon"(2.5.2). How will this area be affected by the road to be built by the project? The EMP does not clarify. The EMP states that "A population of Pygmies exists in the Kribi area forests at a distance from the Cameroon Transportation System's land/system easement" (2.11). What does it mean that Pygmies exist at a distance?

Again, there is no indication of how the Pygmies are likely to be affected by the project. Chapter 5 of the EMP lists as a mitigation measure that the Pygmies will participate through consultation during the construction phase of the project (Chapter 5, topic 10). Given the lack of civil society participation in the project to date, this is certainly not encouraging and is in violation of the Bank's Indigenous Peoples' policy (OP 4.20) which requires the preparation of an Indigenous Peoples Development Plan in tandem with the preparation of the main investment. The EMP acknowledges that it is unable to ".address all location- specific biophysical, socio-economic and health topics at the level of detail required to produce a suite of finalized environmental management actions" (1.4.2).

It appears that the contractors will be in charge of dealing with the location-specific impacts. Since contractors will be under considerable time pressure since they are paying construction crews who are waiting to work, there is a conflict of interest built into this procedure which bodes ill for effective environmental protection. One of the most disturbing characteristics of the EMP is that it shifts responsibility for environmental management away from the Consortium and toward the Government of Cameroon. It places the overwhelming burden of responsibility for appropriate mitigation of measures squarely on the Government of Cameroon (pls. see Chapter 5). There is no assessment of the government's capacity to fulfill this role. At least, a fundamental lack of capacity is evident in the government's handling of the country's alarming rates of loss of tropical rainforest.

Despite almost ten years of World Bank conditionalities on forestry in the context of structural adjustment programs, forestry reform measures have not been implemented (World Bank Office Memorandum, June 25, 1997). II. b) Lack of Oil Spill Response Plan/ Liability Fund The analysis of the environmental impact of the floating storage and off-loading vessel (FSO) component of the project does not include an oil spill response plan nor provisions for a fund to pay liability for damages (including natural resource damages) in case of an accidental oil spill. However, an oil spills response plan, based on a full assessment of the potential damages and risks from oil spills is one of the most basic internationally recognized requirements of any oil development and transport project.

For example, an EIA recently submitted to the European Bank for Reconstruction and Development (EBRD) by a consortium of oil companies seeking to build an FSO near Sakhalin Island in Russia included both an oil spill response plan and a liability fund in accord with accepted international practice. The project only plans on developing an oil spill response plan in the later stages of the construction phase of the project. Without an oil spill response plan and underlying assessment of potential oils spills risk, damages, and liability, it is impossible for the public to know how much damage will result if there is an oil spill from the FSO, and, specifically, whether the responsible parties would have adequate resources to contain the oil spill and prevent broader environmental and social impacts.

There is no mention in the EIA or the EMP of how COTCO (the Cameroon Oil Transportation Company) would pay compensation in case of an oil spill. It is standard practice (and the law) in the United States and other countries that the owner or operator of such a facility provide evidence of financial responsibility. III. Conclusion A January 1997 report on the Bank's Oil and Gas Portfolio, which was prepared at the request of the Quality Assurance Group, found that the number of problem projects were proportionately higher in oil and gas as compared with the Bank's general portfolio.

The conclusion of the report is that ".especially in countries with unstable governance, the oil and gas portfolio is almost certain to remain risky and contain an above average share of problem projects." Unstable governance and the potential for violence are present in both Chad and Cameroon. The proposed Chad/Cameroon Oil & Pipeline project is likely to further aggravate an already volatile situation. The situation in Nigeria and the oil-related civil war in the Republic of Congo are disturbing examples of the impact of oil development in the region.

Moreover, we have little reason for optimism concerning the environmental attitudes of the oil consortium. In a Wall Street Journal article of October 14, 1997, the chairman of Exxon states that developing countries ought to avoid environmental controls because otherwise they risk losing foreign investment. There appears to be little recognition that most people in Africa depend directly on land, forests and on the water in streams to meet their needs. Africa has witnessed a long history of extraction of its natural resources, which has contributed little to improving the quality of life of ordinary citizens throughout the continent.

We call on the World Bank to use its skills and resources to find alternatives to the presently risky Chad/Cameroon Oil and Pipeline project. The Bank's financial resources should be used for operations which have direct positive impacts on nutrition, health, education and other priorities of the people of Chad and Cameroon.